Australian Communications and Media Authority Bill 2004

Bills Digest No. 78 2004–05

Australian Communications and Media Authority Bill 2004

WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.

The package of bills implementing the merger
takes an approach of minimal change to the existing regulatory
arrangements:

the Australian Communications and Media Authority Bill 2004 (the
Main Bill ) establishes the new body, the ACMA;

the Australian Communications and Media Authority (Consequential
and Transitional Provisions) Bill 2004 (the Consequential Bill
)

repeals the Australian Communications Authority Act
1997 and the provisions of the Broadcasting Services Act
1992 that relate to the ABA

replaces references to the ABA and the ACA in other Commonwealth
legislation with references to the ACMA

a number of existing acts that impose taxes or fees are also
amended to replace references to the ABA or the ACA with references
to the ACMA. This caters for the requirement in section 55 of the
Constitution that laws imposing taxation shall deal only with the
imposition of taxation. These amending acts are as follows:

The idea of merging the ABA and the ACA has
been under active consideration since 2002, although the idea was
contemplated by the Productivity Commission in its report on
Broadcasting in April 2000.(1) In May 2000, however, the
Government tabled in Parliament a Convergence
Review, which largely favoured the continuation of
existing arrangements:

The ideal regulatory institutional structure would
exploit organisational synergies and facilitate the transparent
management of different types of policy objectives. This suggests
that the current division of labour between the ACCC (economic
objectives), the ACA (technical objectives) and the ABA (primarily
cultural and social objectives) is broadly correct.

Carving communications competition
responsibilities out of the ACCC and putting them into a new
regulator would reverse the trend towards generic economic
regulation. This would be difficult to sustain because electronic
and physical infrastructures become more substitutable means of
service delivery. Shifts in market boundaries suggest that a
whole-of-economy approach to economic regulation remains the best
approach to economic regulation, and that competition
responsibilities should remain with the ACCC.

The principal area of ambiguity is the split of
spectrum management responsibility between the ABA and the ACA.
This arrangement has been based on a clear division between
broadcasting and non-broadcasting spectrum. The appropriate future
division of responsibility will depend on a number of factors,
including the pace and direction of broadcasting industry change
and the growing use for broadcasting of spectrum outside the
broadcasting services bands. If these factors become important or
are recognised as likely developments, then a rethink of the
division of responsibility for spectrum management may be
needed.(2)

In August 2002, the Department of
Communications, Information Technology and the Arts released a
discussion paper on spectrum management, and, in particular, on
whether changes in the respective roles and responsibilities of the
Australian Communications Authority (ACA) and the Australian
Broadcasting Authority (ABA) would be likely to lead to
efficiencies or other improvements in spectrum
management.(3) Both the ABA and the ACA supported a
merger between the two bodies in their submissions on this
discussion paper.

In August 2003, a further
discussion paper was released, focussing on the key issues that
would need to be addressed if the two bodies were
merged.(4) On 11 May 2004, in association with the 2004
05 Budget, the Government announced its intention to merge the two
bodies, while maintaining the existing offices of the ABA and the
ACA throughout Australia, at least for the time
being.(5)

The Liberal Party s 2004 election policy made
the following undertaking:

A re-elected Coalition Government will legislate
to give the ACMA power to consider complaints alleging serious and
specific cases of bias, lack of balance, inaccuracy or unfair
treatment in respect of ABC and SBS broadcasts or publications. At
present, the ABA is only able to consider complaints which relate
to the ABC and SBS Codes of Practice. This amendment will provide a
more complete, streamlined and responsive complaints-handling
process in respect of both national broadcasters.(6)

Some administrative measures have already been
taken to merge the two bodies, by the appointment of the
Chairpersons of each authority as Associate Members of the other
authority.(7)

The current institutional arrangements
governing the regulation of broadcasting and communications are
outlined in the August 2003 discussion paper:

The ABA and ACA have prime responsibility for the
regulation of broadcasting, telecommunications and, to a more
limited degree, the Internet industry sectors in Australia.
Broadly, the ACA has responsibility for regulating
telecommunications and radiocommunications, including managing the
radiocommunications spectrum. The ABA is broadly responsible for
planning and regulating the broadcasting services bands within the
radiofrequency spectrum, broadcast licensing, and online and
Australian content functions.

The case for merging the two communications
regulators arises from developments that have been occurring in the
communications environment over the past decade. Digital
technologies are reshaping communications industries. Previously
distinct sectors now compete across increasingly convergent markets
using a range of different delivery platforms. For example, the
development of third-generation mobile technologies has created new
businesses that are offering telephony, online and potentially
broadcasting-type services on the one network and one piece of
consumer equipment. Digital technologies are also transforming
broadcasting services. Over time the distinction between
traditional television and radio broadcasting, and new types of
broadband interactive content services, will become less clear.

The convergence of communications technologies and
markets is placing growing pressure on the current regulatory
institutional arrangements. In Australia, different components of
the same industry are currently subject to regulation by two
different agencies. For example, Internet content regulation is
undertaken by the ABA while the ACA regulates Internet carriage
service providers; broadcasting licences are obtained from the ABA
while apparatus licences for broadcasting transmitters and
ancillary broadcasting uses are obtained from the ACA. For
businesses in the sector to engage with both regulators results in
increased compliance and transaction costs. The regulators
themselves are required to cooperate on a range of issues that span
their separate responsibilities resulting in additional
administration costs which are passed on to industry and, in turn,
their customers.

While the impact of convergence is currently
manageable within the existing dual-institutional structure, the
capacity of each regulator to administer its responsibilities
effectively where they intersect with those of the other regulator
is expected to diminish over time. Further, given their distinct
responsibilities, it could become increasingly difficult for
separate regulators to take a more strategic view of wider
convergence issues.(8)

The paper goes on to point out that the United
Kingdom established a single regulator for the sector in 2003, and
that the United States and Canada have long had a single regulator
covering broadcasting and telecommunications.

The Government suggested in the August 2003
discussion paper that the ACMA should be a government authority
under the Commonwealth Authorities and Companies (CAC) Act. However
the new body as proposed in the Main Bill will be a prescribed
agency under the Financial Management and Accountability (FMA)Act.
In a 1999
review of the FMA and CAC Acts, the Joint Committee of Public
Accounts and Audit explained the difference between the two pieces
of legislation:

The FMA Act sets out the requirements for agencies
which collectively comprise the legal entity, the Commonwealth .
Such agencies function as financial and custodial agents for the
Commonwealth without acquiring separate legal ownership of the
money and assets they deal with on behalf of the Commonwealth. The
CAC Act, on the other hand, covers public sector bodies which have
their own separate legal identity by virtue of their incorporating
legislation. This allows them to acquire ownership of money and
other assets coming into their possession.(9)

Since the ACMA will not be able to hold money
or property in its own name, the Consequential Bill provides for
the transfer of the assets and liabilities of the ABA and ACA to
the Commonwealth.

The Joint Committee of Public Accounts and
Audit also noted the difference in the reporting and accountability
arrangements between the two Acts:

There are two avenues by which the CEOs of
Commonwealth entities are held accountable:

to the Prime Minister (FMA Act agencies) and to the Board of
Directors or shareholder Ministers (CAC Act bodies); and

In this era of convergence between technologies
and the digitisation of our broadcasting platforms, the differences
between the broadcasting and telecommunications sectors are
becoming increasingly blurred. For instance, 3G and broadband
technology will increasingly deliver content traditionally
delivered by television and radio.

In recognition of this increasing convergence,
Labor will merge the Australian Broadcasting Authority with the
Australian Communications Authority to create one communications
regulator.

Labor will also ensure that the merged regulator
continues to recognise the social policy objectives relating to the
broadcasting services band. Labor recognises that the broadcasting
services band should not regulated by commercial imperatives alone.
Commercial broadcasters play a significant social role in their use
of public spectrum. Labor will therefore ensure that the integrity
of the broadcasting services band regulatory scheme, which
recognises the social role of broadcasting, remains in place.
Broadcasting spectrum will continue to be subject to separate
regulations from other communications spectrum under a Federal
Labor Government.(11)

The ALP had previously said that the merger
would produce savings of $75m over a four-year
period.(12) The Government responded that no savings are
to be expected from the merger:

Unlike the proposal floated by the Opposition, the
Government s planned merger involves no reduction in resources
currently allocated to the ABA and the ACA to conduct their
statutory functions.(13)

The Australian Democrats have expressed
reservations about the proposed merger:

The Democrats have grave concerns about the merits
of merging the media standards functions of the ABA and the
technical regulations functions of the ACA.(14)

The Australian Subscription Television and
Radio Association (ASTRA), the Service Providers Industry
Association (SPAN) and the Australian Film Commission supported the
idea of a merger.

The Federation of Australian Radio
Broadcasters and the Federation of Australian Commercial Television
Stations both opposed the idea of a merger in their submissions on
the 2002 discussion paper, on several grounds:

that the need for change had not been demonstrated

that the concept of convergence had been overstated

that broadcasting use of the spectrum is qualitatively different
from other uses, and cannot be divorced from the social and
cultural objectives which broadcasting services are expected to
fulfil , and

that broadcasters do use spectrum efficiently, and pay
significant licence fees.

They stated that maximising public benefit
should not be equated with maximising public revenue, and that
social and cultural benefits should be taken into
account.(15) This view was supported by the Association
of Independent Regional Radio Broadcasters.

A number of bodies supported the option of
making the ACA responsible for the management of broadcasting
spectrum access, while leaving the oversight of broadcasting
program content with the ABA. These bodies included the
Australian Electrical and Electronics Manufacturers Association,
the Australian Information Industry Association (AIIA), Telstra and
Motorola.

The Australian Telecommunications Users Group
(ATUG) recommended that an advisory group be established to prepare
a Discussion Paper on a merged regulatory structure encompassing
the roles of the ABA, the ACA and the telecommunications-specific
functions of the ACCC. Optus also believed this to be the best
option.

SBS found that substantial change was neither
justified nor in the public interest. Nor was the ABC convinced of
the need for change, being concerned that in any merger the
provisions of the Broadcasting Services Act guaranteeing ABC access
to spectrum would not be accurately and completely transferred to
the new legislative regime. The Australian Children s Television
Foundation also opposed any change, emphasizing the need for an
independent and empowered broadcasting authority in Australia.

These submissions were largely repeated in the
submissions on the 2003 discussion paper. However, Commercial Radio
Australia Limited (CRA) and Commercial Television Australia (CTVA)
joined the group opposing the idea of a merger, while Ian
Robertson, media lawyer and then ABA board member, supported
merger.

There has not been much media comment on the
merger, but these two extracts from editorials give an idea of the
issues. Firstly from the Age:

On the face of it, creating a single regulator for
the broadcasting and telecommunications industries makes sense,
because changing technology has meant that broadcasters and
telecommunications companies are increasingly in direct
competition. To cite the usual example: third-generation mobile
phones can deliver telephony, data and broadcast services over a
single network to a single customer device. But it takes more than
technological innovation to create an integrated, competitive and
well-regulated market. The telecommunications companies have mostly
welcomed the approaching change but broadcasters have not, because
they fear they will be compelled to bid for the spectrum they use
to transmit their services, as telcos do, instead of paying licence
fees. Communications Minister Daryl Williams has said that the
Government has no intention of overhauling industry regulations,
and that the merger of regulators will be purely administrative in
its effects. This is hardly enlightening. If the new authority is
being created because formerly distinct markets are rapidly
becoming a single market, as Mr Williams concedes, how can he
dismiss the prospect of regulatory change? The Government needs to
explain clearly what it expects from the new regulator. And, above
all, it must ensure that the authority is led by someone who will
act, and be perceived to act, without the conflicts of interest
that too often ensnared Professor Flint.(16)

and secondly from the Australian Financial
Review:

Broadcasting regulation, thanks to the efforts of
communications ministers from both sides of politics to curry
favour with powerful network owners, is as big a mess as it s ever
been. And there is not the slightest sign that either the Howard
government or the opposition will do anything to change that. The
government plans to merge the ABA with the technical regulator the
Australian Communications Authority but in a policy-neutral way,
which sounds like a lost opportunity. What it should be at least
considering is whether detailed content regulation of the kind that
got Professor Flint into bother in the cash for comment inquiries
is of much value in the modern media world. Most people know Alan
Jones isn t Walter Cronkite, and other media are not subject to
intrusive regulation of their output, beyond the minimum taste and
decency standards the community demands. In broadcasting, this has
been traditionally justified by scarcity of spectrum. Now modern
technology has created abundant spectrum if only our political
masters would trust us to enjoy it the case for such regulation is
weaker.(17)

Clauses 8 to 11 set out the
ACMA s functions, grouping them under headings for
telecommunications, spectrum management, and broadcasting, content
and datacasting. These functions are essentially the same as those
currently in the Australian Communications Authority Act
1997 and the Broadcasting Services Act 1992.

Clauses 19 21 provide that
the ACMA shall consist of a Chair, Deputy Chair, and 1 to 7 other
members. The Chair and Deputy Chair must be full-time appointments.
Appointments may be made for up to five years, but may not extend
beyond ten years.

Clauses 24 25 provide for any
number of associate members to be appointed by the Minister for
specific purposes, such as inquiries or investigations.

Clauses 46-49 allow for the
establishment of Divisions within the ACMA, composed of at least
three members, to undertake specific functions delegated under
clause 50.

Clause 54 provides that the
staff of the ACMA shall be employed under the Public Service
Act 1999.

Clauses 56 57 require the
ACMA to prepare a corporate plan every year, covering at least
three years, and to make an annual report to the Minister, which
shall be tabled in the Parliament.

Clause 59 continues in
existence the Consumer Consultative Forum established under the
Australian Communications Authority Act 1997.

Schedules 1 3 of the
Consequential Bill amend various Acts in line with changes made by
the Main Bill.

Schedule 1 item 5 repeals the
Australian Communications Authority Act 1997.
Items 6 58 repeal sections of the Broadcasting
Services Act 1992 that refer to the ABA and its interaction
with the ACA, and insert references to the ACMA where
necessary.

Schedule 4 Part 2 provides
for the transfer of the assets and liabilities of the ABA and ACA
to the Commonwealth.

Patrick O'Neill and Peter Prince
9 December 2004
Bills Digest Service
Information and Research Services

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